Jan. 9 — The Office of Inspector General (OIG) will not impose sanctions on a specific compensation arrangement that a large, rural acute care hospital has with a cardiology group, the OIG said in a new advisory opinion. The three-year co-management arrangement includes the physician group receiving a performance bonus for implementing certain measures related to patient service, quality, and cost savings associated with procedures performed at the hospital’s cardiac catheterization laboratories.

The OIG concluded that the arrangement contains sufficient safeguards, such as fixed-fee, employee satisfaction, patient satisfaction, and quality components that do not involve an inducement to reduce or limit services. Therefore, the arrangement does not implicate the Civil Monetary Penalty of the Social Security Act and poses a low risk of fraud or abuse under the federal anti-kickback statute.

The hospital, located in a medically underserved area, operates four cardiac catheterization laboratories on its main campus; six of the physician group’s interventional cardiologists perform procedures in these labs. The cardiology group is the only such group on the hospital’s medical staff and the only physician group in town that provides cardiac catheterization services.

HFMA Analysis: Co-management is a strategy more organizations are considering to align economic incentives between physicians and hospitals in order to improve the quality and reduce the cost of care for patients. The OIG’s analysis provides a great example of how the incentives for these types of arrangements can be structured to facilitate the goal of value improvement. 

Publication Date: Wednesday, January 09, 2013